Productive Club Helping you follow your dream

Cognitive Biases – The Complete Guide – Types, Tips, Examples

Cognitive biases are errors which occur in human thinking due to which we make poor decisions or perform an incorrect action without our knowledge.

Your brain helps you make all the right decisions, right? Wrong. Your mind is prone to some errors. To make that worse, you won’t even realize you’re making a mistake.

In this article, we will cover:

  • Why our brain makes errors in decisions
  • The types of mistakes the brain makes
  • Real life examples and how they effect you
  • Tips to overcome those flaws and improve your critical thinking skills

What if I told you your brain can make biased decisions due to many cognitive biases? What if your brain favors certain things and often compels you to make decisions that cause more damage than good? You will find that hard to believe.

Our brain helps us make the right decisions throughout the day. It helps us drive on the right path to work, be nice to people, eat at the right time, not bump into people, and so on.

However, at times, it can act as a corrupt intelligent robot from the movies. It does a lot of computations before you can blink and makes a wrong decision.

Cognitive biases

What are cognitive biases?

Cognitive biases are flaws in human thinking process due to which we make poor decisions or perform an incorrect action. Various factors influence the error like memory, information available, emotional state, and circumstances.

The world is a complex place and over the years, the brain has evolved to make quick decisions.

For example, if you spot a snake next to your feet while walking, you jump immediately. You do not spend 2 seconds thinking, “Oh, I see a snake. It might be poisonous and I will be in danger if it bites me. I need to run.” Instead, you react within the blink of an eye.

This response, called the flight or fight response helps us stay alive. Similarly, your brain takes quick decisions to allow you to go through your daily life with ease like recognizing people, holding conversations. If every action and reaction required conscious thought, imagine how much of a mental struggle you’d have to go through.

Due to your brain’s ability to process complex information quickly, it compromises on thorough thought on some occasions.

An example of cognitive bias

The worst part of such fallacies of the brain is, you cannot completely prevent such impulses from your brain. You might reduce some of them with practice but never will you be able to fully get rid of them.

Therefore, building an awareness of the existence of such flaws of the mind is the most you can do. You will not have success if you try to get rid of them.

I will explain how. Before we get to the point, take a look at this offer on Amazon. You can purchase a portable Bluetooth speaker at a 66% discount and the deal ends in the next 19 hours.

Amazon speaker at 66% discount

What did your mind tell you? Unless you already are an electronics geek who knows the average price of such goods, you would have found this an attractive deal. You even decided so in a matter of a few seconds.

Your mind told you “Hey, the offer saves you 66% and you have to decide in the next few hours. Should we buy the speaker?” Boom, your brain convinced you that the deal is fantastic.

Well, whether you buy the speakers or not is not the point. But didn’t your mind easily convince you about the benefits of the offer, because you noticed a 66% discount?

Now, if you search for Bluetooth speakers on Amazon, you will find many other Bluetooth speakers at the same price. But your mind decided in a split second that because the first speaker had a 66% discount, the deal was a bargain.

Amazon other speakers at same price

Your mind failed to consider how much a Bluetooth speaker costs on an average, what quality parameters to look at or if you even need a Bluetooth speaker. The decision was solely made because your brain believes anything on discount helps you save money.

Why is our brain biased?

Our brain has descended over centuries as a child of evolution. As far as our knowledge tells us, the human brain is the most sophisticated living matter that exists today. We haven’t been able to understand the functioning of the brain completely yet.

Scientists still have a long distance to go to know how the brain works the way it does. Due to extensive brain research in the last few years, we end up learning new things about our brains daily.

Our brain has evolved over billions of years, starting from a single-celled organism that showed up 3.5 billion years ago. Take a step back and think about the world 500 years ago. People were still fighting wars, killing each other, expanding empires. We have transcended from absolute monarchy and butchery to democracy and peace.

If the way our brains think has changed so drastically in a few hundred years, imagine what changes could have occurred over a period of billions of years. Our brain is the most awesome brainchild of evolution.

Due to the evolution over the years, some of the beliefs in the brain are hardwired within us. Evolution takes its own sweet time to iterate and moves at a slow pace. A change can take hundreds, thousands or even millions of years to take effect.

Once it takes effect, the change remains for a thousand or millions of years. During these long periods, what was once created to gain an advantage might cause an unnecessary impact in another area.

Experiments and Research – System 1 and System 2

System 1 and System 2 thinking

Kahneman and Tversky explain how we have a System 1 and System 2 within our brain.

System 1 is quick to react and come to a conclusion. Whenever you do not have to think or analyze to act, it’s your system 1 in effect. In simple words, we call it intuition. All your emotions originate from system 1. It’s nature’s way of avoiding the need to spend a long time making a decision.

System 2 is far slower, but a lot more logical and thoughtful in comparison. If you need time to process your thought, analyze, calculate, consider pros and cons, it’s your system 2 that does the job. All your rational thought and critical thinking are handled by system 2.

Examples of situations where you system 1 handles the action:

  • Adding 10+10
  • Identifying your brother by his looks
  • Holding a casual conversation with your best friend

Examples where system 2 handles the action:

  • Multiplying 23*37
  • Deciding to invest your money
  • Trying to invent a new product and start a business
System 1 and system 2 characteristics

You cannot always prevent your system 1 from jumping into action. Let’s try a simple activity to see it in effect.

A bat and a ball cost 1.10$ in total. The bat costs 1 dollar more than the ball. How much does the ball cost?

Did you answer 0.10$? Well, that’s the wrong answer. If the ball costs 0.10$, the bat should cost 1.10$ adding up to 1.20. The right answer is, the ball costs 0.05$ and the bat costs 1.05$.

No matter how intelligent you are, your system 1 will prompt you with the wrong answer unless you have heard the puzzle before. The smarter people suspect something fishy due to the simplicity of the question and pause for a second to confirm the answer. That’s when system 2 takes control and finds the right answer.

The example illustrates how both these systems work together in your brain. System 1 is all your overall knowledge summed up together and ready for access in a fraction of a second. But due to its speed, it is prone to errors. System 2 takes effort on your side and won’t take effect unless you choose too. But when it steps in, you will make a mindful decision.

The brain works the same way even if you’re an expert in a field. The researchers had tested the effect of stereotypes on a sophisticated statistician who had a clear understanding of how intuition works. Yet, he fell victim to the bias as well. Though he realized his mistake in a second, he could not prevent his system 1 from making a poor judgment.

Why does the brain have cognitive biases? – Pros and Cons

Evolution focuses on survival before anything

In the early days of the human race or any species, survival was the focus. Evolution operates purely from a survival perspective. In the future, after billions of years, this might change.

Evolution focuses on survival

But for now, evolution optimizes an organism to increase its chances of survival. Evolution is like a kid who focuses on the ice-cream before any other nutritious food.

For example, fear as an emotion evolved to prevent you from dying. Why do you fear a lion as soon as you see one? Never has a lion attacked you, but your fear within prompts you to run and rightly so.

You fear heights because nature wanted to keep you safe from falling off a cliff and killing yourself. But today, when you stand on the ledge of a bungee jump you feel fear tingling down your spine and anxiety rushing through your knees and thighs.

You know you have a harness. You know you will end up safe in a few minutes. You know you won’t kill yourself due to the jump. Yet the fear of heights ingrained in you triggers an emotion.

Like fear of heights and danger, your brain makes many other decisions by default. These decisions are not only based on prior experience but also based on information fed to you since your childhood.

Most children are petrified of the dark while some can breeze through it like a supermodel on a ramp. The darkness remains the same but the reaction varies because no two minds operate alike. Not even the brains of twins.

Real Life examples of flawed decisions

The human brain has a level of sophistication making it very difficult to decipher its functioning. Therefore, certain things ingrained in your brain can prompt you to make a decision based on what your mind tells you.

Focus on medium sized cup

For example:

  • Buying a medium sized coffee because it seems like the most optimal choice even if you do not know the size of the cup(Anchoring Effect)
  • Finishing food off the plate because you should not waste food(Sunk Cost Fallacy)
  • Pursuing entrepreneurship because people who have tried hard have made a ton of money(Survivorship Bias)
  • Buying a house because real estate ends up as a good investment(Availability Bias)
  • Believing you always encounter red lights when you are in a late but never when you leave early(Confirmation Bias)
  • Assuming the product which has a thousand 4.5 star reviews on Amazon will work for you(Social Proof)
  • Convincing yourself that the good results happened due to your talent while the bad results were caused by bad luck(Overconfidence Bias)

These are only a few examples. Our mind is an amazing tool. On one end it has the potential to do some unbelievable feats which no scientists can figure out how. On the other, your brain commits some rookie mistakes due to the information ingrained within it.

How to overcome cognitive biases

The worst part of such fallacies of the brain is, you cannot completely prevent such impulses or thoughts. You might reduce some of them with practice but never will you be able to fully get rid of them.

It is like trying to fight an army having grenades and missiles with a horde of cavalry and infantry. What you practice for a few years will seem like a speck of dust in comparison to the billions of years of evolution.

These biases will stick to your brain like algae stick to damp areas.

Therefore, you will not have success if you try to get rid of them. So do not even bother trying eliminating them completely. You can only reduce the impact these biases create in your life.

Moreover not every bias has the same solution. Depending on kind of bias, you will have to dig down deeper to learn how to combat it. All cognitive biases do not have a one fit for all solution. That said, here are 5 generic tips to begin:

1. Awareness:

Your sharpest weapon against these cognitive biases is your awareness about them. If you’re clueless that these flaws exist, you will not even know how they’re impacting your decision making skills.

For example, every time you go to a coffee shop, the middle-sized cup will seem like the best choice by instinct. Over time, your awareness that the choice may not be the best, will prompt you to ask “How big is the cup?” or “Do I need so much coffee right now?” Without knowing about the anchoring effect, you would walk out of every coffee store with a medium-sized cup.

The awareness of the biases and their effects on people is crucial to combating them. Without the knowledge of these biases, the other tips will fail. Due to your new-found wisdom, you can override the decision that your intuition feeds you with and make a logical decision instead.

2. Mindfulness

As human beings, most of your daily decisions run on autopilot without any conscious thought. The motion of your toothbrush, the pace of your walk, the length of your footsteps, the way you tie your laces are predetermined. You do not think and perform such actions.

Our lack of conscious thought prevents us from using our System 2 to analyze and come to a better conclusion. For example, you and I often make mistakes by saying something we shouldn’t have or using the wrong words. Using 1 second to be more mindful about what comes out of our mouth, helps us catch many of the biases our brain has.

3. Practice

No matter how much you practice, do you think you will be able to get rid of the fear-induced in your body when you come face to face with a lion? No way. You might argue, what about the circus trainer? Sure, he might not fear the lion in the circus. Try putting him face to face with a lion in the jungle.

But does that mean you should not practice fighting against these biases? Absolutely not. For example, the circus trainer will be better equipped to face a lion in the jungle because of his practice. Likewise, the more you try fighting your cognitive biases, the better you will get.

You will never turn perfect at eliminating all your mental biases, but that’s not our target anyway. The intention is to reduce the impact they create in your life.

4. Self introspect on your worst biases

Not everyone is vulnerable to every bias equally. Your humble attitude and careful planning might prevent the effects of the overconfidence effect. But you might have a habit of sticking to a plan for too long even when it is not worth pursuing due to the sunk cost fallacy.

Only you can identify which are your top biases. Once you learn about all possible cognitive biases, perform an honest self-review to analyze which ones are you the most susceptible to. Just like you cannot go to every war with a common strategy, you cannot fight all biases with the same plan.

Knowing your top mental biases, helps you build awareness, practice the right way, and learn methods to fight them better.

5. Reflect on the past

Whenever things go wrong, big or small, take a few minutes to analyze your thought process and decision making skills.

Did you make the decision without enough thought?

Could you have made a better choice?

Was the choice impulsive due to your emotions or the situation?

When you reflect on your little actions, you will spot the errors you make. Next time, when you’re on the verge of making the same mistake, a reminder pops up in your head saying, “Not a good idea. I need to think this through.”

Fighting cognitive biases is a long term process. You cannot expect to start seeing changes tomorrow. But if you remain patient and practice countering their effect, you will get better over time.

Types of Cognitive Biases

There are various different cognitive biases that exist and new ones are uncovered every day with psychological research. There isn’t a common list of these biases agreed upon anywhere.

Some books like The Art of Thinking Clearly have explained 100 such biases in short while others like Thinking Fast and Slow go deep about a few biases.

This article will cover 25 of the most well known cognitive biases:

1. Confirmation Bias

The meaning of confirmation bias is the tendency to look at new information such that it matches our beliefs and assumptions. As per psychology, confirmation bias is a flaw where we prefer sticking to our beliefs.

We only look at the proof that matches our belief and fail to look at cases that contradict our belief. Even if we encounter proof against our belief, we ignore them as exceptions or invalid.

We love to be right. We love to stick to our opinion. We love to prove our ego right. We do so unconsciously without realizing the influence of the bias. You think you are smart enough to not make such mistakes, but trust me, we all are daily victims of this bias.

Surprised? Let me give you an example. Do you support a political party? Most people do.

How would you react when your party does something which helps the citizens? You laud and praise them.

How would you react when your party does something bad? You tell yourself “they are human, mistakes happen,” and shrug it off.

How would you react when the opposition party does a mistake? You would complain saying the opposition is good for nothing. When they do something good, you ignore it. You might even find a fault in the good they did and go around telling everyone that the move was not as great as everyone thinks.

The bottom line – you want your original belief to stay intact.

Examples of confirmation bias:

1. Astrology/Tarot Cards

Believers and non believers of astrology will stick to their opinion. The believer will look only at the successful predictions made by an astrologer. The non-believer will refute the claim by stating some predictions made by the astrologer which did not come true.

2. Conspiracy theories

Many people, including Americans, believed that the moon landings were fake and filmed at Area 51.

Try providing a logical explanation to a conspiracy theory believer. He will shoot back with a scenario that seems unclear(Example: How did the flag flutter?).
The conspiracy theory believer will not argue against valid proof. His argument will always be a different questionable scenario about the theory.

3. Your lucky ….

You might have a lucky outfit that you wear to interviews, presentations, dates or other important events. You believe the outfit influences the results in your favor. The truth is, you fail to consider other outfits that have delivered favorable results and the cases where your favorite outfit failed.

You associate success to that outfit and mentally wipe out the cases where it failed.

How to avoid confirmation bias:

Overcoming the confirmation bias is impossible unless you know that it is rampant throughout your life. Now that you have read this article, you understand how the bias lures you into confirming your own beliefs.

1. Force yourself to find negative cases

When you find yourself conforming to a belief, force yourself to find negative cases. Whether you want to believe ghosts exist, palm reading works or that a specific stock is a great buy, check if you can find evidence which disproves your theory.

2. Ask for a second opinion

When you find yourself arriving at a conclusion quickly, apply your brakes. Ask for a second opinion when possible and listen to the inputs. You can still turn back to the original choice but consider the inputs with a neutral mindset.

3. Be open to criticism

The biggest proof against your belief comes as criticism. For example, you might have an idea which you believe can be the next big thing. When you tell others about the idea, some will criticize your idea.

But you ignore the criticism. You assume people are jealous of your idea or because they do not know enough.

4. Gather more information

It is easy to fall victim to the confirmation bias when you only have a few cases to prove your theory. For example, if you believe that IT stocks are on the rise, finding 2 or 3 stocks that conform to your theory isn’t good enough. You need more data.

Confirmation bias explained

2. Sunk Cost Fallacy

In economics, sunk cost means a cost paid which can no longer be recovered. The sunk cost fallacy urges you to continue doing what you are doing because you have invested time, money, or energy in it. The more the money, energy, or time invested, the harder it is to stop investing further time or money.

The primary reason for sunk cost fallacy is, the worry of loss bothers you and prevents your mind from accepting the loss.  The other reason for the sunk cost fallacy lies in the discomfort of accepting a mistake.

Even if the reality has sunk in, you do not want to appear wrong in the eyes of the world. You stick and put in more effort, time, and money into a known bad decision due to the adamance of being right.

Examples of Sunk Cost Fallacy:

1. Eating more than necessary because you pay for the buffet:

Whether you eat just one dish or all the dishes on the menu, the price does not change. However, since you paid for the buffet, you try to make up for it by showing the inner glutton in you.

2. Investing more money in a business idea:

You invest a 100,000$ in adding a new product to your business, but it fails to sell well. Since you have already invested a ton of money and effort, you decide to continue pouring it money and energy to make it successful.

3. Dating/Marriage involving a bad relationship:

You have realized that the relationship you’re in isn’t working for you. As much as you want to call it off, you find it impossible. Since you have spent 3 years already, breaking up would seem like the effort gone wasted and having to start over again. 

Is sunk cost bias always bad?

Not necessarily. Sometimes the bias prevents you from making impulsive decisions. For example, filing a divorce because a few things went wrong may not be the best idea. Your bias of persisting with the relationship which you have already spent time on helps in keeping your relationship intact.

How to overcome sunk cost fallacy:

1. Ask yourself what are the factors influencing your decision. If the main reasons seem like past effort and money spent, rethink your decision.

2. Involve another person in the decision. A second perspective on your thoughts can help you consider all angles.

3. Consider what you are losing too. When you avoid deciding because you incur a loss, think about what consequences will you face if you took no-decision. For example, not selling a stock that is losing money can imply more money lost and lesser capital to buy quality stocks which will increase over time. Do not only look at a decision from the angle of loss.

4. Use the 5-minute rule. Try to spend 5 quality minutes thinking all angles of a decision. Do not decide on impulse. Consider the teeny tiny details and reasons behind what your inner voice is telling you.

5. Keep personal attachments aside. When you are dealing/selling with anything of your own, know that you value the item/idea/opinion more than the others do. Ask yourself if the emotional attachment is triggering an unnecessary impulse within yourself.

Sunk cost fallacy explained

3. Clustering Illusion

Clustering illusion is a flaw of the human mind where we find patterns in random information when no pattern exists. Our brain has been designed to identify patterns to make better decisions. But guess what do we do when no patterns exist? Our brain simply creates one.

We see patterns that aren’t there. We see a streak when none exists. We see shapes and symbols in a pile of irregular and random data. Our brain has a hard time accepting that the information is random.

Examples of clustering illusion:

1. Noticing shapes in clouds:

Have you looked at a cloud and felt like it had taken the shape of a specific object or person? When you ask your friend to peek at what you saw, he finds another pattern altogether.

2. The Virgin Mary Bread

A woman claimed, her 10-year-old sandwich had the face of the Virgin Mary. Devotees have reported similar cases around the world where they notice shapes of Jesus Christ, The Buddha or other sacred people.

3. Nostradamus predictions

Nostradamus is believed to have predicted the death of Henry II, the Great Fire of London, the French Revolution, Napolean’s conquest and what not.

The truth is, Nostradamus had written pages of such generic gibberish. If you are hell-bent on connecting that gibberish with an incident after it has occurred, you will find a link. 

How to overcome Clustering illusion:

1. Get more data

Random patterns seem apparent when you have a small set of data. You have to accept that little data is only little data. Either find more data or do not make predictions without enough data.

2. Do not attribute a lot of importance to small data

When you make a prediction based on a small amount of information know that the chances of making a mistake are high. As much as possible avoid predicting with small amounts of data unless really necessary. 

3. Be doubtful

Approach decisions with a fair amount of skepticism. Ask yourself questions and do not convince yourself unless you have compelling proof or at least good enough data points.

4. Perform small experiments

If you have a hunch that seems right, test it such that the consequences are not massive. For example, if you want to buy a stock based on graphs you have analyzed, then buy in small values. Until you confirm that your learning and prediction is right, do not play with big money.

Clustering illusion explained

4. Anchoring effect

The anchoring effect is the tendency of the human mind to focus on the first available information. All the further available information tends to get compared with the information first offered. The effect takes prominence when you do not have a clear idea of the price or the number beforehand.

For example, when you have no clue how much a chandelier costs and the first one shows a price tag of 220$, any chandelier offered at 150$ seems like a bargain.

Surprisingly anchors work even for unrelated comparisons. Researchers Russo and Shoemaker performed a study by asking students when was Attila the Hun defeated. Before asking the question though, the students had to write down the last 2 digits of their phone number.

As baffling as it may sound, people with higher phone numbers chose later years as the year of Attila the Huns defeat.

Examples of Anchoring Effect:

1. Shopping:

When you visit a store looking for a T-shirt, the expensive T-shirts are displayed on the front. A 120$ price tag you see first makes the 70$ T-shirt seem like a better deal.

2. Buying cars:

When selling any cars second hand, salesman intentionally mention a higher price to set a high expectation. A high initial price followed by a negotiation gives you a false impression that you walked out with a bargain.

3. Discounts:

When the big e-commerce sites announce a sale, you feel the urge to grab the opportunity. Have you wondered what is the need to display the original price? Well, it makes the discount stand out and catch your eye.

How to avoid anchoring bias?

The bad news is that you cannot stop your mind from being vulnerable to the anchoring bias. The first available information will almost always place an anchor in your head whether you are investing a huge sum or buying a small item.

1. Know you are vulnerable:

When you walk into a store know that the store will use the anchor effect to urge you to buy a higher-priced item. Having the awareness of falling victim helps you in adding those 2 additional seconds to think. 

2. Be prepared to explore options before deciding a price:

Do not go with a mindset that you will buy on a price that seems the best to you based on the first few options. You must prepare yourself to logically arrive at the best price.

3. Set a mental anchor before you receive the first information:

Before stepping into a store to buy a t-shirt, make a mental estimate of how much would you pay for it. Having an estimate prevents the first price from setting an anchor.

4. Delay your decision:

When you are dealing with any unknown territory, tell yourself that you will come to a decision of an average price after exploring, say 5 options.

Anchoring effect explained

5. Survivorship Bias

The survivorship bias is the flaw of your brain due to which you look at the most obvious information and generalize it. You look only at the stories of success and ignore the cases of failure altogether.

“Many of the successful people dropped out of college and started their own company.” How does the statement sound?

Doesn’t it seem like the few people who dropped out of college, go on to build an amazing product?

Well, think again. For every college drop out who turned out successful, a big number of dropouts ended up unsuccessful. But those stories will never reach you because the internet contains more stories of success than failure.

Examples of survivorship bias:

1. World War 2 Airplanes:

During World War 2, the bombing planes were returning with damage on various parts making them difficult to reuse. By looking at the areas of damage it seemed like wings and the tail took the most hits indicating a need for higher armor in those sections.

The analysis is flawed because it fails to take into account that maybe the planes which got damaged in the other areas never returned safely.

2. Buying stocks based on trends:

Investors buy stocks based on the current market trend. Some people look at the portfolio of successful investors and try to replicate it. By replicating only the stocks purchased, the newbie investor fails to look at the other factors which make the stock a wise buy. By looking at the best picks of previous stocks, you are only looking at the successful stories.

3. Sports event predictions

You must have heard about various animals like Octopus Paul predicting the result of matches. Many other animals like hippos and porcupines are used for such guesses. When one animal manages higher correct guesses due to sheer coincidence, the story becomes a news. All those who failed never make the headlines.

How to avoid survivorship bias

1. Inspect more than one case:

Whenever you make a quick decision based on one success story, you almost certainly fall victim to the survivorship bias. Remind yourself that you do not need to hurry. Look at more examples to evaluate your assumptions.

2. Consider negative cases:

When you encounter successful stories, look for the failure cases too.  Please note that such negative or failure cases are not easily found by looking on the internet. You will need to put in the effort, ask people around to find and learn from them.

3. Consider other factors:

External factors such as the timing, opportunity, and market can greatly influence the success of an idea. 

Survivorship bias explained

6. Outcome Bias

Outcome bias is our tendency to judge a person or a decision based on the result than on the process. After the outcome, analyzing the reasons for failure or success seems easy. But making a decision before the result was obvious is challenging. The outcome bias causes you to think “I knew it.” Such statements are easy to make after you know the outcome, not before.

Many a time, the reason for the outcome turns out to be random. But you might assume this randomness to be a masterstroke by the person who made the decision. A lot of successful “gut-feel” predictions are nothing but the effect of the outcome bias.

On the other end, sometimes good decisions can go wrong too. A decision done with good intentions and enough thought might face criticism due to the wrong outcome.

Examples of outcome bias:

1. Possible evacuation of the Pearl Harbor:

Soon after the Pearl Harbor attack, people blamed the US intelligence for not evacuating even when they had intel about a possible attack. Before the attack, the US intelligence had many cases where similar intel prompted a need to evacuate. But questions about evacuation were raised only after the bombing.

2. Decision made by a sports team or a captain

During critical championship event, a team or the captain makes a move which seems different from the usual tactics. Whether this tactic gets praised or criticized depends on the outcome.

3. Stock Market Crashes

After the 2008 stock market crash, many analysts provided prior signs which seemed to “clearly” indicate the sign of an upcoming crash. Analysts make such claims all the time and the claims turn incorrect more often than they turn true.

How do you avoid outcome bias?

Like any other bias, you can get rid of the outcome bias. Our brain has a natural tendency to attribute outcomes with success and failure. When you find yourself judging based on the result, you can ask yourself a few questions:

1. What caused the outcome?

Ask yourself was the decision or action the whole and sole reason behind the outcome? Chances are, other factors influenced the outcome too.

2. Could I have followed a better process to make the decision?

Ask yourself, did I choose one option after considering facts and applying thought? If you did, the outcome does not matter. After any major outcome, good or bad, take the time to think about lessons to learn from the decision made.

3. Was the decision obvious before knowing the outcome?

After you had the outcome, you can easily go back to say, “We had information X, why did we not take the right action?” Now ignore the outcome and only look at information X. Ask yourself what should have been the most sensible decision at that point.

Outcome bias explained

7. Availability Bias

Availability bias is our tendency to give more importance to the cases which are easy to remember. You assume cases easier to remember as available in plenty or the truth.

We generalize based on what comes to our mind or recently available information. The human mind looks to complete a task using the path of least effort. Thus, easily available information can influence the actions or the decisions you make.

Examples of availability bias:

1. Doctors/Consultants deciding based on prior results

A patient can show up at a hospital and shows 10 different symptoms. 6 of them match the symptoms of flu and 4 of them do not. If the doctor cannot map the 10 symptoms to a different ailment, chances are the doctor will diagnose the patient to have flu.

If you hire a consultant to figure out why the paint of your walls keeps peeling off and he does not know why the consultant is unlikely to tell you “I don’t know.” The consultant will pick one of his most familiar method or reason even if it may not apply to this case.

2. Worrying about flying in a plane

Do you know that the chances of a person dying in a plane crash are 1 in 25 million? Compare that with the chances of dying in a car crash which is 1 in 5000. But we worry thinking the flight might blow apart into smithereens mid-air because such horrific stories come to our mind first.

3. Overestimating risks of dramatic problems and underestimating risks of simple problems

When a shark attack happens, we bid bye-bye to swimming. As per statistics, you are more likely to win a Nobel prize than being attacked by a shark. You also associate more risks with rape in a cab, midnight burglary, cold-blooded murder, terror attacks or tornadoes.

You ignore working out because heart attacks are common. But you are far more likely to die from a heart attack than a terror attack.

How to overcome the availability bias?

1. Consider events not so dramatic

Consider the gravity of less dramatic outcomes such as heart attacks, asthma, obesity, blood pressure, and car accidents. You need to pay more importance to stay fit by working out than trying to prevent your death from a bomb planted by a terrorist.

2. Consider negative cases

Every time you feel like making a decision based on readily available information consider the negative cases. 

3. Look beyond what is available

When a decision seems obvious, take a step back and think again. You can avail the internet today at the tip of your fingers and look at a plethora of information in a matter of a few seconds. 

4. Use checklists

We love to convince ourselves that we rarely make mistakes. Use a checklist before making any major decisions. Draft a simple 5 item checklist to ensure you do not miss any important validation.

Availability bias explained

8. Overconfidence effect

Overconfidence bias is the tendency to overestimate our abilities and talent. We believe that we are better than we actually are. Due to the simplicity of the phenomenon, most people do not believe that they consider themselves as overconfident. The truth turns out to be the opposite.

Various studies have proved this, like 65% of Americans considering themselves above average in intelligence, 84% Frenchmen believing they are above average lovers, and so on.

Whether you are a student, an employee, a driver, a lover, or a normal man, you exhibit overconfidence in your abilities whether you realize it or not.

Examples of overconfidence effect:

1. Construction of the Sydney Opera House:

The Opera house was estimated to complete in 4 years with a cost of AUS $7 million. It took 14 years after the first estimate with a final cost of AUS $ 102 million. The people behind the construction had tons of experience, yet drastically misinterpreted their abilities.

2. The Everest Disaster

In spite of life-threatening conditions, 2 veteran mountaineers, decided to proceed further in spite of crossing the deadline of 14:00. They were confident of returning home. Unfortunately, the conditions ended as a disaster for all 8 who proceeded further.

3. Estimating timelines

You regularly overestimate the pace at which you complete a task. You believe you can complete many tasks by the end of the day. But when you finish the day, you still have tasks left to do.

4. Believing you do not need to learn

At work, people assume themselves to be better than most others. Due to this overconfidence, the need to learn and improve seems unnecessary. 

How to overcome the overconfidence bias?

1. Think of the consequences

While making a decision, calculate what would happen if you went wrong. When you realize how badly a decision can hurt you, you will have a reality check.

2. Act as your own devil’s advocate

When estimating your abilities, challenge yourself. When you play the role of the devil’s advocate, you will ask yourself the right questions.

3. Reflect on your mistakes

Spend 10 minutes every evening thinking what mistakes could have been avoided and what could you have done better. This reflection alone will prevent you from committing the mistake again.

4. Pay attention to feedback

If you pay enough attention to the words you hear, you can identify an area to improve. Feedback does not always have to be over a one on one conversation on a serious note in a meeting room. Feedback comes in from all corners if you keep your eyes and ears open.

Overconfidence bias explained

9. Authority Bias

Authority Bias is the tendency to blindly follow or believe the instructions and views of a person in authority. As human beings, we have evolved over the millions of years as a herd, led by a leader. The leader alone, or a set of trusted advisors, made the big decisions and the rest followed suit.

As a result, human beings have a deeply rooted sense of duty to follow authority.  In the age-old days, kings, queens, and ministers played the role of an authority. Today, the politicians or CEO’s play the same part. Even experts in a profession such as doctors, economists, celebrities fit into the role of authorities.

Accepting the statement and belief of an authority blindly does not make sense anymore. Your behavior and actions should not be solely driven by guidelines from a different person. You must apply your thoughts and judgment.

Examples of authority bias:

1. Expert advice on the stock market

Every day, people keep a close eye on the market. People follow the analysts on the news channels and the “experts” on websites. Stocks recommended by the analysts are purchased by many, expecting to make a good return on their investment.

2. Avianca 52 Flight Crash

he ATC told the co-pilot to land the flight at a nearby airport. All the copilot had to do was reply saying, “We do not have the fuel to do so.” However, the copilot respected authority and found it difficult to challenge the decision. 

3. Listening to the advice of the successful

Believing that the methods used by others will fetch you success is trusting an authority figure too much. Waking up at 5 AM and taking huge risks are not the only elements that lead to success. 

4. Commercials with celebrities

When Usain Bolt drinks a chilled Coca Cola after a sweaty run, you feel like drinking one too. If your neighbor did the same after his morning run, would you feel the same? I don’t think so.

5. Social Media Influencers

Several people buy the facial scrub recommended by the model who has 1M followers. Teenagers purchase the latest dress worn by a model at a photoshoot. Sports fanatics buy the shoes worn by their favorite footballers.

How to overcome the authority bias?

1. Think logically

Whenever you have to follow any instruction, think with an open mind if you are doing the right thing. If you believe you have an important opinion against the decision, bring it up. Do not go with an assumption that whatever your boss says holds more value than your thoughts. 

2. Assume the same recommendation to come from a person of lower authority

If you find a suggestion or an assignment questionable, ask yourself what would you do if it had from a person with lesser authority? If you believe you would have outright rejected it, you cannot blindly accept it just because it comes from authority.

3. Question the person

When the decision has a major impact, probe with more questions. Your questions might help the other person think in the right direction and change course. Asking “why” helps both you and the person in authority understand the importance of the task at hand.

Authority bias explained

10. Social Loafing

Social loafing is the tendency of a team member to put in less effort in a group when individual performance is not visible. You and I get into a mindset thinking, “Why should I put in all my energy when I can manage with lesser?” The effect increases with the number of people involved.

The bigger the group, the stronger the effect. In a group of 2, if you put in less effort, the other person can identify your laziness. When the number increases to three, four and beyond, pinpointing the individual showing lack of effort grows harder and harder.

There are many types of social loafing such as free-riding, sucker aversion, and more.

Examples of social loafing:

1. Rowing and other sports events

Rowing takes place both as a relay, where one member rows at a time and as a team event, where everyone rows together. The difference in performance in individual vs team events has caused teams to lose medals and championship events.

2. 1994 Black Hawk shootdown by team members

In April 1994, two US pilots misidentified and destroyed two friendly helicopters killing a total of 26 military and civilians on board. Many people failed in their responsibilities that day assuming other team members had done the necessary checks to proceed with such the deadly move.

3. Presence in meetings

The fewer the number of people in a meeting, the more attentive you are. Many people join large group calls, put them on mute and carry on with other work.

4. Bigger risk as a team

As the group size increases, you tend to take bigger risks. You know that if things go wrong, the group takes the blame as a whole. 

5. Corruption

In countries where corruption is rampant, people complain about the prevailing problem. But the same people do not hesitate to pay a bribe to get their work done.

How to overcome social loafing?

The key factor in learning how to reduce the effect is by adding clarity and measurement to goals, tasks, and results. Managers and leaders can play a key role in preventing it.

1. Make goals less vague

The vaguer the goals are, the easier it becomes to sweep bad performances under the rug. Setting SMART Goals for the team works best.

2. Consider smaller group sizes

The bigger the group, the higher the chances of people taking it easy. Smaller groups make individual performances more visible. 

3. Break a large goal into tasks for individuals

When a goal turns into a bunch of individual tasks, everyone turns accountable. The breakdown of the tasks leads to each team member having specific things to do.

4. Allow people to choose tasks

When a team member has to contribute to an activity that he does not care about, the chances of social loafing increase. If people work on what they like, the motivation to give their best arises by itself.

5. Measure progress individually

Along with measuring the team performance, have a way to evaluate how well each team member is doing. In some games like baseball, statistics clearly separate the good performers from the bad.

Social loafing explained

11. Omission Bias

Omission bias is the human tendency to judge a harmful action as more immoral than inaction, even if both lead to the same results. Your brain tricks you into a false sense of morals based on action vs no action.

For example, let us say 100 people suffer from an incurable disease. A doctor comes up with a medicine that kills 20 people on the spot but saves the life of the other 80. If you have to approve the drug, would you do it?

Most people will withhold approval. Killing 20 people immediately seems terrible compared to saving the other 80 even if they suffer from a disease with no cure. Though the drug saves more lives overall, the action of approving the drug which kills a few people seems more unethical than letting all the patients die due to disease itself.

Examples of omission bias:

1. Euthanasia vs refusing life-saving measures

Euthanasia is the act of intentionally killing someone very sick to prevent suffering. Such a practice is illegal in most countries. In contrast, the law considers refusing life-saving support by choice as legal. One leads to death by action and the other by inaction.

2. Parents denying vaccination for children

Some parents refuse to vaccinate their children due to the possible side effects. Even though inaction, in this case, can lead to death, it creates a fake moral comfort for the brain.

3. Fewer fouls during the end of the game

Have you noticed how referees behave during such moments? Under the immense pressure of making the right decision, the referees prefer to not call out fouls unless they are severe.

4. Murder case witnesses

Many witnesses refrain from giving out evidence which can prove a person guilty. Compare that with a witness giving out false evidence. Most people would scream how shameful such action is. But people fail to consider that, a witness remaining silent can lead to the wrong person being held guilty too.

5. Sticking to a job you hate

The comfort zone of the current paycheck leads to people sticking to a job which makes them nauseous. Making a change kicks in a fear of losing what you already have. The decision of continuing things the way they are seems like the right choice even though it implies a compromise for decades to come.

How to overcome omission bias?

There are no easy ways to overcome the omission bias. Your best bet is to always consider the cost of inaction while making any major decisions.

Omission bias explained

12. Representative Heuristic

The representativeness heuristic is the tendency to make an instant decision based on readily available attributes such as looks, behavior, or current known facts. Representativeness bias is the reason why people create stereotypes.

Your brain has categorized people and things into different buckets based on various features. When you find something similar, you jump to a conclusion based on your belief.

You consider a person with curly hair and glasses, a computer programmer. You believe a talkative and funny person will make a great sales executive. You assume a person wearing a suit in a tech park must hold an executive position. Even though no one asks you to make a guess, your mind starts judging automatically.

Examples of representativeness heuristic:

1. Mental judgments:

You are traveling on a train, and you notice a passenger reading a book. Is he a Ph.D. or a graduate? Most people would guess he’s a Ph.D. though more graduates exist than doctorates.

2. First impressions:

An interviewer can assume that a well-dressed person will turn into a better employee. A court judge can judge a person based on his untidy beard and unkempt hair.

3. Overconfidence:

A guy may assume he can easily beat his new lady friend in a race without knowing her driving skills.

How to overcome representativeness heuristic?

1. Use the 2-second rule:

The 2-second rule is about pausing for a second before taking any action. Though you cannot make path-breaking decisions in a second, the small gap can help trigger your system 2 to make a better decision than your impulsive system 1.

2. Evaluate the base rate and the completeness of the information:

Before making a decision, take into account the base rate of the circumstances involved. A vague stereotype seems more likely compared to a plain vanilla description.

Representativeness heuristic

13. Diffusion of Responsibility

Diffusion of responsibility is a behavior where an individual fails to take action when others are present around. The individual assumes that another person will take action or has already done so.

Research in psychology suggests that the chances of taking action depend on other factors such as the number of people present, anonymity, expertise, sex, familiarity, etc.

Latane and Darley performed experiments to determine the effect of diffusion of responsibility under different scenarios. They presented how responsibility or the lack of it, goes through a sequence of 5 steps – notice, interpret, take personal accountability, decide what to do and act.

Examples of diffusion of responsibility:

1. The Nazi Trial:

When the Nazis were prosecuted for their crimes after World War II, the defense used the concept of diffusion of responsibility to prove their innocence. Since many of the Nazis were following orders, they claimed they weren’t responsible for the heinous crimes they committed.

2. Failing to bring toothpaste on a trip

How many times have you assumed that another person would bring toothpaste on a trip? Sometimes, everyone makes the same assumption, and finally, nobody has toothpaste packed.

3. Rowing and other sports event

Rowing takes place both as a relay, where one member rows at a time and as a team event, where everyone rows together. The difference in performance in individual vs team events has caused teams to lose medals and championship events.

How to overcome diffusion of responsibility?

1. Make your path and goals clear to yourself

When you bring in clarity to your goals and direction, you make constant progress towards them. The more vague your goals are, the more you tend to go astray.

2. Track progress

Introducing a system to measure individual progress can help motivate people to put their best step forward. Let us take an example where salespeople have to achieve a group target.

3. Build a reward system

When a larger group size is involved, setting a reward for individuals and the team for achieving milestones can help people stay on track. The leaders must take the onus of building a reward system for the people involved.

Diffusion of responsibility explained

14. Shiny Object Syndrome

The shiny object syndrome is a tendency to chase a new target instead of sticking to the original goals. We exhibit behavior where we chase a new goal for better returns while giving up on the old one.  Little kids work as the best example of the behavior. Give a kid a toy, and he will joyfully play with it until you get a new one.

As soon as the kid lays his eyes on the shiny new toy, he forgets about the old one altogether.

The effect is prominent in entrepreneurs where one feels like chasing a new idea or building a new product to succeed. The need to chase one goal after another arises due to factors such as Fear of Missing Out(FOMO) and Greed.

Examples of shiny object syndrome:

1. A new way to lose weight

After joining the gym, different methods of losing weight catch your attention. One speaks of lifting weights with an average diet, another suggests a strict diet with a minimal workout, and so on. You move from one method to another without sticking to one long enough to see results.

2. A new relationship

All relationships have some issues or the other. Partners fight, disagree, and argue over their differences. Such hassles can make a third-person appear attractive and a better potential partner.

3. A new market opportunity

When the value of Bitcoin started shooting up, people across the globe began investing in cryptocurrency. Similar greed-based behavior shows up everytime a new opportunity comes up.

4. Chasing a new business opportunity

When entrepreneurs notice the business potential in a new idea, their mind starts thinking. The effect increases multifold when they are working on an idea that isn’t delivering enough returns. They abandon all the work they had done towards an old idea to chase a new opportunity.

How to overcome shiny object syndrome?

1. Think ideas through

Consider what all you might have to overcome to make a new idea successful. Do not neglect the fact that the new idea will consume your time, leaving you with fewer hours. You might have to give up on the goal you’re already chasing.

2. Abandon the current plan only when you have a strong reason

Consider how far you have come with your ongoing target and how far are you from the result. Take into account the price you pay for losing the progress you have made so far.

3. Wait out on the idea

Waiting out on the idea can help you diffuse the initial excitement. When a new idea shows up, the spark can lead you to make decisions on impulse.

4. Spend time on research

Spend time researching if pursuing a new opportunity is the right move. Find out details about people who have done similar things before.

Shiny object syndrome explained

15. The Negative Feedback Instinct

The negative feedback instinct is your tendency to spot flaws first. Even if there are good things to talk about, the negatives come to your mind in an instant. You may find some positives to talk about or none at all.

Your mind tries to find what is wrong first. Sometimes you say it out loud, and sometimes you don’t. You may spot the good later or miss it altogether.

The negative feedback instinct triggers when someone requests your opinion or when you analyze something. If you provide feedback yourself, you will give a genuine one. The degree with which this happens varies from person to person. Based on your personality and thought process, some have a higher tendency to think negatively first.

Why do we find a flaw?

1. The survival instinct

Trying to focus on negative events like disease, calamities or danger helped us stay alive. Though the risks no longer exist, your brain is hardwired with the old software.

2. Loss aversion

Researchers have proven that the pain of losing 20$ is more than the joy of winning the same amount.  Your brain somehow treats negative events with more weightage than the positive side.

3. Not providing any advice affects your self-esteem

When someone comes to you asking for feedback, you want to show some expertise and reciprocation. It hurts your ego to mention, “Sorry mate, I have nothing useful to add. You have done a better job than I could.”

How to overcome the negative feedback instinct?

1. You do not have to find a flaw

When people ask you for feedback, they do not always expect a suggestion on what they could change. More often than not, people are at crossroads in their heads. They reach out for feedback to validate their action.

2. Check for your own biases

All your opinions trigger from your core beliefs. Sometimes the flaw isn’t in the other person but within you.

3. Give feedback taking the person into account

When you provide feedback, take into account the expertise of the person asking for it. Do not bombard them with suggestions and changes which they cannot follow or implement.

4. Give minimal feedback when you’re not an expert

When anyone asks you for feedback outside your area of expertise, keep it short. Do not forget to add that it is only your opinion, you’re no expert, and your feedback won’t be the best.

5. Find the reason for seeking feedback

Not knowing the reason why you’re giving feedback can lead to conflicts and wrong actions. Some genuinely look for inputs to improve. Some reach a point of confusion and make a decision based on your feedback.

Negative feedback instinct explained

16. Instant Gratification

Instant Gratification is the behavior of opting for immediate pleasure now instead of a better return in the future. You feel like you want something and you want it now. Right now!

Even though you know patience and discipline will yield a better reward, you cannot resist the urge of indulging in immediate bliss. “Damn it”, you say soon after. The most common examples of instant gratification occur with food, shopping, sex, and entertainment.

Instant gratification syndrome stems from multiple reasons such as human evolution, greed, uncertainty, state of mind and dopamine.

Examples of instant gratification:

1. Wasting time on social media

Browsing through the news feed of Instagram, checking out pictures of what you’re friends are up to, liking beautiful pictures and posting stories on what you had for lunch seems fun at the moment.

2. Snoozing

The comfort of extra sleep right now outweighs the plan that gives you joy in the future.

3. Eating junk

When you go to a restaurant, the juicy burger with a thick patty and melting cheese, sways your mind in the opposite direction. You give in and postpone your weight loss plans for the day.

4. Working on urgent tasks

The daily tasks take precedence over the long term goals you plan to achieve. Addictions trigger a dopamine rush within your body. These are hormones secreted by your brain which makes you feel good. For the same reason, a drag off a cigarette seems like a stress buster. 

How to overcome instant gratification:

1. Eliminate the source of distraction

You will find it easy to resist the urge if you do not face the temptation at all. Trying to fight the urge is no easy feat.

2. Identify your triggers

Once you know where you fall victim to instant gratification, use the first tip to avoid the temptation itself.

3. Make your decisions more thoughtful

When you pay more attention to the little decisions you make, your choices become more conscious. When you apply a little rational thought, you will overcome the damage caused by instant gratification with ease.

Instant gratification explained

17. Moral Licensing

Moral licensing is the process of fooling ourselves to justify bad behavior using other good behavior. Some call the behavior self-licensing. The effect causes people who exhibit good behavior initially to later perform dishonest, unethical or bad actions later on.

The phenomenon manifests in two ways:

1. Your past good actions warranting current bad actions:

After completing a positive action, you feel you have the license to do something bad. For example, if you started working out today, you believe you can eat a bowl of ice-cream. 

2. Your future plans justifying the current behavior

When you make a plan to stop a bad habit or cultivate a good habit, you believe you can over-indulge in bad behavior until you begin.

For example, if you plan to start eating healthy next month, you believe you can binge eat till then. 

Examples of moral licensing:

1. Completing a task and taking a break

When you have a long list of things to do, what do you do after completing one important task? You feel you deserve a break.

2. Cutting down one habit and increasing another

When you cut down one bad habit, you self permit yourself to increase the frequency of another. After a certain point, you return to both bad habits with increased frequency.

3. Overindulging in bad habits before a specific date

When you decide to quit a bad habit, you set a date for yourself to begin. What do you do when you know you are quitting sugar in 2 weeks? You binge on them for the next 2 weeks thinking you will not have the opportunity to relish them again.

4. Spending after saving

Saving money in one area can lead to a higher expense in another. Saving pennies can turn into an excuse to splurge pounds right under your nose.

How to overcome moral licensing:

1. Use the 2-second rule of receive pause respond

Whenever you are about to indulge in bad behavior or stray away from the good, pause for a moment to apply the 2-second rule. The small break of just 1 or 2 seconds can cut your current line of thought.

2. Ask yourself if you’re under the influence of moral licensing

As silly as it sounds, you can ask yourself if you are under the influence of the phenomenon. The sneakiest trick of moral licensing is your ignorance about the effect. 

3. Do not frame your behavior as good or bad

Instead of tagging your next action as good or bad, think of the goal it effects. If your actions help the goal, proceed to do it. If not, drop it.

Moral licensing explained

18. Diderot Effect

The Diderot effect is one purchase leading to a shopping spree of more items. Grant McCracken coined the term in 1988 based on a poem written by Diderot.

You can describe the Diderot effect using two ideas:

Goods purchased become a part of the identity of the customer and compliment each other

A purchase which does not match the current circumstances can lead to further spending

The Diderot effect story goes back to the 18th century. The phenomenon is named after a poem from a French philosopher Denis Diderot. 

Examples of the Diderot effect:

1. Buying a new laptop

When you buy a new laptop, chances are you will also buy a new mouse, headphones, and speakers to get a better feel of the new device. Even if you have old accessories in a working condition compatible with the new device, you can mentally justify the need for new ones.

2. Buying a new phone

When you replace your old phone with the latest model, you will also purchase a new cover. Though this purchase is necessary and justified, you do not consider the expense as a part of the phone budget.

3. Spending on weddings

A similar string of purchases occurs when a couple plans a wedding ceremony. Having better decor leads to a more fancy cake and champagne. Adding majestic chandeliers requires the bridal party to wear more exquisite clothing. An extra dish added to a menu calls for another item to supplement it.

How to overcome the Diderot Effect:

1. Avoid unnecessary purchases

The most simple and elegant solution to the problem is to reduce the number of purchases itself. The fewer items you buy, the less you will spend on related items.

2. Account for the additional cost involved with related purchases

When you spend a large sum of money, you will need some more items to accommodate your purchase. Planning for the extra expenses in advance helps you be better prepared. The fear of total expenses might stop you from thinking about adding one item after another.

3. Put a limit on expense

When you know the buffer you have set, you can choose among the top items that can go with your original purchase.

4. Consider your current circumstances before buying a new luxury item

Spending a few minutes thinking about how your new purchase could fit into your current environment will help you foresee the next purchases you might make. If a new purchase does not seem to fit into your existing situation, hold off the idea of buying it for now.

5. Avoid the trigger

If you avoid the trigger, you shield yourself from impulsive buying. For example, if you purchased a new car, staying away from a bunch of car lovers can help you avoid buying fancy accessories to make the vehicle look a class apart.

Diderot effect explained

19. Another Choice Myth

Another choice myth is the tendency to choose an alternative which we know little about instead of dealing with the problem at hand. It is the gut feeling that the other option might lead to a better outcome.

You might have heard the famous saying, “a known devil is better than an unknown angel”. It implies you feel comfortable with a situation or a person with flaws even if you have an alternative you do not know much about.

For example, employees prefer staying at a job they hate because they fear that the next job could end up worse.

But often, we tend to do the exact opposite of what the saying suggests.

Examples of another choice myth:

1. Investing money

You hear about people making tons of money by investing in the stock market, so you start learning how to do it yourself. When you hit a roadblock, you find an alternative investment more lucrative. For example, you believe you could make money with ease in real estate instead. 

2. A new potential partner

If you’re dealing with some trouble with your relationship, you might find yourself attracted to a new person you just met. You fail to consider that the new partner might have different flaws which you have no clue about.

3. Alternative business venture

When you face difficulty with your current business, you believe that pursuing another idea might lead to success.

4. A new job

People tend to find faults with the job they work at. Though every job has some issue or the other, you believe the next job will be better than the current one.

5. Firing Leaders/Managers

When the current employee is struggling, the management blindly believes that the next candidate will turn into a stellar employee.

How to overcome the another choice myth:

1. Know your triggers

Not everyone chooses the same alternative in every situation.  Identify the little details of your life where you quickly decide to switch between options. Knowing your triggers is the key to conquer the syndrome.

2. Pause for 2 seconds for simple decisions

Spending 2 seconds helps you make a logical choice. When you notice a promising alternative, pause for 2 seconds and ask yourself, “Am I making the right call?” More often than not, your brain is powerful enough to make the right choice.

3. Compare the pros and cons of each

The sneakiest trick of the another choice syndrome is that it brainwashes you into comparing the cons of your current situation with the pros of the alternative. Comparing the possibilities on both sides might cause you to realize, “oh, I am such an impatient idiot.”

4. Delay your decision during stress/anger

When you’re emotionally charged, your brain makes a quick decision without using the part which makes logical decisions. To avoid such outcomes, do not make any decision until you calm down.

Another choice myth explained

20. Dunning Kruger Effect:

The Dunning Kruger effect states, when you know only a little about a topic, you tend to think you know a lot. In simple words, the lesser you know about a subject, the higher the overconfidence in your abilities.

When you know nothing about an area, you do nothing because you do not know where to begin. When you learn a little about the topic, your confidence skyrockets. You believe you know everything necessary and consider yourself an expert.

After you gain more knowledge, you slowly start realizing what you lack. Little by little, your overconfidence starts reducing. After you develop more expertise, your confidence starts building up again, but this time for the right reasons as shown by the upward curve.

When you do not know enough about an area, you are not capable enough to judge how good or bad you are. The skills you need to get better at are precisely the skills required to judge expertise.

Examples of Dunning Kruger Effect:

1. Delusional participants in reality shows

Have you watched any reality shows which involve singing, dancing, or any other stage performance? If you have, you must have seen contestants making them a fool out of themselves on the stage. The problem is, such people are ignorant about bad they are. 

2. An employee believing he will be a fantastic manager

An employee who has never been a manager considers the role easy. “How hard can leading people be?” you wonder. Unless you dive into leadership, you will have no idea about the challenges involved.

3. Investments

Take for example, the stock market. When you know nothing about the field, you remain skeptical about investing.

Once you gain a little understanding of the basics, you believe you have mastered the area and invest a massive sum of money. The mistakes cost you badly, and you lose all you had. 

How to overcome the Dunning Kruger Effect:

1. When you know little, learn more

If you are new to a field, do not make any impulsive decision. Test the waters and gain more knowledge.

2. Ask someone who has done it before

The best way to subdue your overconfidence is to talk to a person who has a vast experience on the subject. A simple 30-minute conversation with an expert will help you realize how pitiful your knowledge is.

3. Ask for feedback

Try finding out what others think about your skills. If you’re fantastic in an area, people will tell you. If you’re terrible, you may or may not receive genuine feedback depending on who you’re asking.

Dunning kruger effect explained

21. Serial Position Effect:

The serial position effect is a tendency of the human mind to recollect the first and last items of a sequence/list more easily than the ones in the middle.

The serial position effect does not apply to lists and sequences alone. Let’s take another real-life example. Have you struggled to remember a phone number recited to you when you had no means to note it down? After hearing the 10 digits, you’ll notice that you remember the first and last bits, but those in the middle seem jumbled up.

The effect is attributed to the human brain’s two other cognitive biases called the primacy effect and the recency effect. 

How to use the serial position effect:

1. Don’t cram

Whether it a test at school or a presentation at work, do not stay up the whole previous night.  If you’re unprepared, don’t try to go all guns blazing in one night. Target a small portion, give yourself breaks between the study and get enough sleep. You’ll do far better than a sleepless night of endless reading.

2. Use the Pomodoro technique

Jim Kwik, a top brain coach of the world and the author of the book Limitless, recommends using the Pomodoro technique while studying to make use of the effect.

He mentions that learning in smaller batches creates more start and end points that trigger more of both the primacy and recency effect.

3. Force yourself to recall

A common mistake of learning is trying to finish all the material in a sequence. Instead, break the learning material into parts. If you’re learning 5 chapters, try to recall what you’ve learned at the end of each chapter. Try to fill the gaps in your memory and understanding before moving to the next chapter.

serial position effect

22. Hedonic Treadmill

The hedonic treadmill is the tendency to return to the same state of happiness irrespective of the positive and negative incidents that occur in life.

Every major event leads to happiness or displeasure, but that’s only short-lived. After a while, you no longer feel the same contentment or pain about the episode because you get habituated.

Over time, no matter what the change, you will adapt to the circumstances and your state of happiness will return to its original level. What was excellent or repulsive for some time, turns into the norm. The tendency is also called hedonic adaptation as per psychology and is one of the cognitive biases of the human mind.

Examples of Hedonic Treadmill:

1. More income:

Irrespective of what you earn, you’ll look forward to making more money. The common tendency is to improve the standard of living as and when you have more money.

2. Career growth

If career growth is among your goals, you will never quench your thirst for stepping it up. Whether you’re an employee or an entrepreneur makes no difference. As an employee, you start as an individual contributor and grow yourself into a subject matter expert or a manager. But, the buck doesn’t stop there. You strive hard to become a senior manager, a director, an executive, and so on.

3. Materialistic things:

The need for better materialistic things never ends. It applies to houses, phones, cars, computers, refrigerators, and whatnot. Yes, sometimes the appliance is outdated or old, and replacing it makes sense. But, often, you feel the urge to purchase a new object just to feel better. 

23. Selection Bias

Selection bias is an effect where the wrong choice of data or participants can unintentionally cause incorrect predictions or poor decisions. Even if you have all the right intentions, you need the right information to make the right choice.

Though the bias primarily affects polls and research, as per psychology it can also influence the decisions you make in real life. 

Though the bias primarily affects polls and research, as per psychology it can also influence the decisions you make in real life. 

Examples of Selection Bias:

1. Asking for feedback:

When you ask for feedback, different factors influence what people tell you. Depending on whom you ask and how you ask, the result can vary.

2. Starting a business:

Selection bias is common among entrepreneurs. When you believe in an idea, you assume your business will go on to become the next big thing. When you have to validate your idea in the early stages, you start looking at similar successful businesses. You believe that the data is suggesting you pursue the idea and go all in.

3. Taking decisions in groups:

When you are making decisions based on what others are doing, you might interpret a false reality. The behavior of those around you can influence many of your habits like working out, risk-taking, investment methodologies, and more. 

24. Functional Fixedness

Functional fixedness is the tendency to use an object only for the purpose it was designed for. Our mind prevents us from thinking of new ways to use familiar objects. Our thoughts remain within a closed box of standard methods, thereby stopping out of the box thinking.

How functional fixedness effects you

1. Doing the same thing the same way

When was the last time you asked yourself, why are you following a specific method for a task?

Often, you follow a conventional method thinking that is the only way to get the job done. You fail to think if you can find a better way to accomplish the task.

2. Assuming your way is the only right way

Such behavior is typical in interviews. An interviewer drafts questions expecting a predetermined answer. Such siloed thinking interviews are more of a reflection of the poor skills of the interviewer than the candidate.

The same thought process applies in marriages, friends, and a group of acquaintances.

3. Chasing a goal with a fixed plan

People have the habit of chasing a goal with a predetermined approach. Having a plan isn’t wrong. Pursuing a target without a plan is indeed a poor approach. But when the plan fails, most people give up.

25. Mere Exposure Effect

The mere exposure effect is the tendency to develop a preference for things merely due to being familiar with them. Such behavior occurs with words, songs, faces, shapes, and so on. The effect is common with visual and auditory(sound) information. 

You do not always need a positive response the first time you encounter something. Even if you have a neutral reaction, you can develop a liking after further familiarity. But, if you dislike something the first time, the chances of repeated exposure changing your impression is unlikely.

Examples of Mere Exposure Effect:

1. Sales and advertising:

Marketing campaigns use the mere exposure effect to improve sales. One of the key tactics of marketing is to trigger your brain with the product the company is trying to sell. TV ads use the same technique to feed the item into your mind. 

2. Your regular shopping:

Many of your shopping choices run on instinct than a clear reason. For the little decisions which you do not care about, you spot some benefit the first time. Once you try it yourself, if you don’t dislike the experience, you tend to stick to the choice.

3. The best sellers or top rated options

If you want to develop a habit of reading books, you will choose a well-known bestseller. When picking a movie to watch, the one making the rounds on the news and social media comes to your mind first.

You even tend to like the book and the movie you picked because of familiarity.

strategic thinking

My goal is to help people 1 million people pursue their dreams. Share the article and help me with this mission.

You don't need a reward to join the Productive Club, do you?

Plain and simple. Did you find what you just read useful? Great, then get more of such tips to sky rocket your productivity. Join the Productive Club.
  • Ok this has helped me so much in understanding my Dad. I definitely need to re-read it without the background noise that is surrounding me now. Thank you.

    • Happy to hear that it helped you know your dad better. I do understand it is a long article that needs a long reading time. 🙂

Productive Club

The website has been created to inspire, influence and infect people with positivity and help people begin their journey of chasing their dream goals. The target is to help 1 million people pursue their dream while having a full time job. Will you be one among them?